Brexit begins—but is it business as usual?

Published Tue 4 Apr 2017

Issue No. 2548

The Brexit debate is being conducted by two wings of the British political and media elites. Both claim that Britain leaving the European Union (EU) will lead to profound changes—for the worse, according to the Remainers, for the better according to the Tory and Ukip Brexiteers.

Neither group is particularly representative of big business in Britain. The economic core of the ruling class didn’t want Britain to leave and so is pressing for Brexit to involve as little change as possible. It’s quite possible that this may be what actually happens.

What is becoming clear is how boxed in Britain is in the negotiations over the terms of Brexit.

As numerous commentators have pointed out, because triggering article 50 of the Lisbon Treaty sets a two-year clock running for Britain’s departure, the rest of the EU can just sit tight.

Britain needs a deal, above all economically, to preserve the trade and financial links with the EU that are crucial to British capitalism. So the rest of the EU can drag the talks out to screw the most out of Britain.

So Donald Tusk, president of the European Council, has issued draft negotiating guidelines. These make “sufficient progress” on the terms of British withdrawal—above all, how much money Britain will have to cough up—a precondition for talks on trade starting.

Spain succeeded in tacking onto the guidelines another precondition tying a trade deal to an agreement over Gibraltar. This is another symptom of Britain’s vulnerability.

What’s interesting is how far the stances of Theresa May and her Brexit secretary David Davis have softened. The talk of “no deal is better than a bad deal” seems to have gone.

And there are hints of how the government is willing to pay for trade access and even accept some temporary continuing role for the European Court of Justice.

Adjusting

This apparent shift probably reflects two factors. First, May and Co understand how boxed in they are and are adjusting accordingly. The second is pressure from big business.

The “Great Repeal Bill” that Davis previewed in the House of Commons last week is badly misnamed, since it will make the existing body of EU regulations the default position for a post-Brexit Britain.

According to the Financial Times newspaper, “Britain’s biggest companies have warned against slashing the estimated 19,000 EU rules that the repeal bill will import into UK law when Brexit happens.

“The CBI business lobby group said in a report last year that while many sectors, including chemicals, plastics, food and drink, and financial services, disliked some EU rules, there was no desire to get rid of them. ‘The view emerging in every sector is that these costs are largely sunk for current regulation and seamless access to EU markets is a price worth paying for,’ the report said.”

The one area where May has strongly committed the Tories to change is ending free movement for EU migrant workers. But even here, when interviewed by Andrew Neil last week, she avoided saying immigration would be “significantly lower” after Brexit.

This suggests that the prospect after Brexit will be neither the post-apocalyptic impoverished Little England predicted by Remainers nor the free trade “global Britain” promised by May and the Brexiteers.

This doesn’t mean there are no dangers. One is that, subject to the constraints I’ve described, the Tories and the bosses will try to use Brexit to worsen the rights and conditions of workers. This is something that trade unionists and socialists need to be vigilant against.

Secondly, there is the factor of sheer unpredictability.

On Sunday ex-Tory leader Michael Howard invoked the shades of Margaret Thatcher and the Falklands War over Gibraltar. I doubt there’s a serious appetite in Whitehall and Westminster for restaging the War of the Spanish Succession of 1701-1714. But Donald Trump’s advent to the White House makes one wary of ruling anything out.

The decay of neoliberal capitalism is breeding all kinds of monsters.

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